I guess you did wrong by calling US laws 'ridiculous'...don't insult a country, any country. I guess that's the reason u ain't getting any answers, though your question is broad and can be easily answered by the experienced people hanging outta here...
Australia is considered a Western Country, Also parts of South Africa and New Zealand. So yes it would not be well off for you in this circumstance.
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it is said that laws are only put in place to force people to do things they would not want to do or to stop them from doing things they shouldn't do.
I have been in this business for some time, not since the begining like some people on this board but for a long time, and I have never found the laws of the western world to interfere with servicing customers.
The only thing I can think of would be content issues (maybe kiddie porn), in which case, you have bigger problems than breaking the law.
Still it is tough to find reliable hosting infrastructure in countries that are not largely westernized and capitalist. Otherwise there is just no sense in investing in infrastructure.
Try Pakistan or Mexico. They have more lax laws and still have some infrastructure.